Subject: el paso articles today - ngi
note : the following 3 articles deal with 3 different issues : lst - - marketing related
2 nd - operations / marketing related
3 rd - legislative / regulatory related
el paso explosion takes 500 mmcf / d off market
about 1 bcf / d of flow on el paso ' s south mainline downstream of pecos river
( nm ) station ceased after the
pipeline exploded early saturday , killing 10 people and seriously injuring
two others at a nearby campsite .
el paso said monday it was able to compensate for about half that volume
through a combination of fuel
switching by downstream customers , maximum storage withdrawals , an ofo and
other customer cooperation .
the market reaction was rather predictable as all three california points
rose by about 35 cents to lead an
overall price surge . however , utilities in the state did not appear to be
experiencing any supply problems .
socal gas said storage and supplies from other southwest receipt points were
adequate to avoid any
problems . a gas operations official for los angeles dept . of water and power
also saw no reason for panic .
from past similar incidents on southwest pipelines , he expected that the
approximately 80 - feet - long section
missing from el paso ' s line could be " slapped back into place rather
quickly . "
el paso itself had no estimate for when it can restore service in the
impacted segment ; it must get approval
rom the federal investigators before beginning repairs or evaluating a
restart of the adjacent lines . but a large
aggregator and a marketer agreed with the ladwp official that it should be " a
quick mechanical fix " once
repairs begin . the aggregator believed downtime could be as short as a week .
no customers were cut off as a result of the rupture but some were getting
reduced volumes , an el paso
spokeswoman said .
northern natural gas was seeing a throughput increase of 200 - 300 mmcf / d
monday while transwestern
volumes were up 50 - 75 mmcf / d as a result of shippers diverting gas away from
el paso ' s south mainline ,
an enron spokeswoman said . a producer said she diverted as much of her
company ' s gas as possible from
el paso to transwestern .
people were reluctant to trade permian basin gas monday , especially at fixed
prices , because of doubts
about how much would be able to flow , several sources said . permian numbers
rose a little less than 18 cents
as part of the general upturn . however , it was waha prices that saw a bigger
increase of nearly 30 cents as a
result . " everything in el paso - permian ' s keystone pool was going back into
waha , " said a marketer , putting
waha in the mid $ 4 . 60 s at a premium of more than a nickel above henry hub .
the southern california border , at an average of nearly $ 5 . 30 , led the rest
of monday ' s market by a large margin .
before trading began , enrononline was offering border swing swaps for the
rest of the month at $ 5 . 85 - 95 , a
marketer said . with swing swaps priced so high , it gave sellers more
confidence in what prices they could
command in the day market , he said . " either way , i wouldn ' t want to be short
right now at the border . "
there were lots of rumors but no facts available on what caused the el paso
rupture , noted one aggregator .
" but it ' s a good thing it didn ' t happen until after california had cooled
off . otherwise i could easily have seen
the border basis spread from san juan basin go as high as $ 2 . 50 " instead of
the approximate gap of $ 1 . 70
egistered monday by daily gpi .
a knowledgeable source provided his analyis of the blast : the structure of
the crater made the rupture " look
like a line integrity problem from the way it blew out . " the earth can harbor
leaking gas for a while until eventually
everything all goes up at once . people nearby would not have detected
anything because gas is odorless in
long - haul lines ; the mercaptan odorant is not added until it gets to the
local distribution stage . pipeline safety
surveyors usually will look for dead vegetation in the vicinity to detect a
leak , but this was a desert area with very
little vegetation . it is easily possible for escaping gas to hug the ground
for the approximate 500 - foot distance to
the victims ' campsite and seek an ignition source there . it is a normal
tendency for gas leaking into the atmosphere
to stay close to the ground , and that tendency would have been amplied by the
chilliness of the pre - dawn desert .
the source went on to say , " i think there will be lot more of this [ ruptures ]
in the future with many pipes becoming at
least 40 - 50 years old . " el paso was unlucky in experiencing one of the early
incidents , he said , because the situation
applies to the other lines with old pipe . pipelines used to spend a lot more
money on maintenance when regulation
was tighter and they were still paying for depreciation , he said . " now
they ' re more purely for - profit companies after
having written off their [ depreciation ] costs many times over . "
el paso blast kills 10 ; shuts down south mainline
federal and company investigators monday swarmed over the scene of the
devastating el paso natural gas
mainline explosion that erupted near daybreak saturday , engulfing a party of
weekend campers along the pecos
river near carlsbad , nm , and killing 10 people . two other persons were
hospitalized in critical condition .
three officials from the federal office of pipeline safety ( ops ) and 11 with
the national transportation safety
board ( ntsb ) have been at the site of the blast since late saturday , and two
more ops officials were en route
monday . new mexico gov . gary johnson , who flew to the area on sunday , said he
wanted to know how many
other potential pipeline " dangers " there are in the state . he called for a
thorough investigation .
about 1 bcf / d of capacity on el paso ' s southern leg initially was lost from
the ruptured 30 - inch line and two looped
lines nearby that were shut in after the accident . el paso was making up some
of the shortfall by drawing the
maximum , 200 mmcf / d from its washington ranch storage field downstream of the
accident . increased use of
other pipelines , allocations and cutbacks by customers , and the fact that
weather had moderated in california
helped ease the supply situation . nevertheless , spot prices increased by
about 35 cents for points in california ,
while the rest of the market ( spurred by hurricane debby ) went up about 20
cents .
there was no estimate as to when the looped lines would be back in service ,
according to el paso spokesperson
kim wallace .
" we don ' t intend to put anything back into service until we know for certain
that the remaining pipelines are safe , "
wallace said . she did not expect them to be back in service today , and could
give no time frame on when they
would be returned to service .
it is " much too premature at this point " to predict when the three disabled
el paso westbound lines will return to
service , said patricia klinger , a spokeswoman with the department of
transportation ' s research and special
programs administration ( rspa ) , which oversees the ops .
" the one that ruptured is definitely going to be out of service for awhile ,
and [ another line ] is badly damaged
from the fire . " as for a third adjacent line , that " could potentially be
re - opened , " but " we have to test the integrity
of that line " and have it examined by metallurgists , she told daily gpi .
" everyone will be working , of course , to
try to get this [ line ] back in service . but the safe operation of the
pipeline is of premiere importance . " the three
lines shared the same right - of - way .
" we ' re just now able to start looking at exactly what happened , and how to
get that one line back in service , "
klinger said . " our metallurgist is on his way right now . i know he ' s going to
meet with the ntsb when they ' re
examining the 50 - foot section of pipe that ' s out of the ground " as a result
of the explosion . " i think the company
also wants to decide what types of tests can be done on this line . it ' s not
piggable . "
the ntsb , which has set up a command center in carlsbad , nm , declined to make
any preliminary speculation
about the cause of the explosion . " it ' s much too early for us to even think
about the cause of this accident . we ' re
only dealing with the facts . . . right now , we ' re documenting the pipe itself
and surveying the land . we ' re going to
look at the chronology of when the [ emergency ] calls came in . . . . . document
damage to vehicles , and injuries , "
said ntsb spokesman keith holloway .
" probably at this point we ' re looking at nine months to a year , maybe more "
before the results of the investigation
are publicly disclosed , holloway noted .
the rupture occurred at 5 : 30 a . m . mdt in the underground line near the pecos
river crossing , which is about 30
miles south of the carlsbad caverns national park in a spot popular with
local campers and fishermen . the blast
tore a crater in the earth about 86 feet long , 46 feet wide and 20 feet deep .
according to preliminary reports , the pipeline was underground at the point
of rupture , sending two sections of pipe ,
each about 20 - feet long , flying hundreds of feet . the gas then ignited and
shot flames from the broken pipe toward
sleeping campers . the ntsb estimated there was a gap of 50 to 60 feet between
broken ends of the pipeline at
the site . the fire burned for about 40 minutes before el paso workers
manually shut off pipeline valves .
ten members of two families were burned to death in the blast . the families ,
who were related by marriage , were
camping on public land along the river near where the pipeline emerged from
the ground to cross the pecos in an
aerial crossing alongside a bridge . six were pronounced dead at the scene and
four others died at texas hospitals
saturday night . the dead included five children under the age of six ,
including six - month - old twins . two adults were
listed in critical condition monday at a hospital in lubbock , tx .
the ruptured pipeline , which el paso said was constructed in 1950 , is one of
four that runs along the southern branch
of el paso ' s pipeline system . there is an adjacent 30 - inch pipeline and
another 26 - inch pipeline . the fourth , a
16 - inch pipeline , was abandoned and is not available for service , wallace
said . el paso and federal officials are
particularly interested in the integrity of the second 30 - inch pipeline that
ran close to the broken line .
wallace said that none of the company ' s customers had been cut off of
service , but they were receiving gas as
reduced levels .
she also said that on aug . 2 , a " patrol " inspection , either done by air or
vehicle , was conducted on the pipelines
located near the pecos river by el paso officials and no problems were found .
el paso conducted the last
corrosion test in february and no problems were found then either . visual
inspections are conducted on all of the
system ' s pipelines once a month , she said , and the company follows all
federal pipeline requirements for inspections .
asked whether el paso planned to change its inspection system immediately ,
wallace said that she did not think
so , but said that if the ntsb review finds something that needs to be
changed , the company will do whatever needs
to be done immediately .
" these situations are so rare , " she said . " we don ' t feel that we need to
change what we ' re doing now . but if the
situation warrants , we certainly will make any changes necessary . "
el paso is working with family members to take care of their immediate needs ,
including hotel accommodations ,
food , travel arrangements and medical treatment . the company also is
providing additional services as needed .
" this is a tragic accident and our heartfelt condolences go out to the
families involved , " said el paso energy president
william wise . he said the company was working with the ntsb " to investigate
diligently all matters surrounding this
accident and to establish its cause as quickly as possible . "
the fallout of the explosion is expected to extend all across the country , as
federal legislators consider more
stringent pipeline rules following an explosion in bellingham , wa , that
killed three in june 1999 . locally , carlsbad
mayor gary perkowski said that he wanted to find out what happened and keep
it from ever happening again .
that reaction was echoed by the new mexico governor . " i have a lot of
questions , " said johnson . " what is the
reliability of these pipelines ? what went wrong ? was it preventable ? "
meanwhile , rspa was sifting through its history to determine whether the el
paso blast was the biggest pipeline
disaster on record in terms of fatalities .
timeline :
5 : 26 a . m . aug . 19 : el paso natural gas ' automated computer reading of the
pressure in the pipeline indicates
673 . 5 pounds per square inch .
around 5 : 30 a . m . : an el paso natural gas employee bow - hunting in the area
sees a large fireball at the scene .
5 : 30 a . m . : el paso natural gas ' automated computer reading of the pressure in
the pipeline drops to 377 . 19
pounds per square inch .
5 : 30 a . m . : carlsbad fire department responds to the emergency .
6 : 12 a . m . : carlsbad fire department arrives at the scene .
6 : 21 a . m . : el paso natural gas workers shut off the gas line using manual
valves .
between jan . 1 and june 30 of this year , there have been 40 transmission
pipeline incidents , according to the ops .
fourteen were caused by either external or internal corrosion ; 11 were
damaged by outside forces ; three were due
to construction or material defects ; and 10 were unknown . there was only one
fatality until june 30 of this year on
transmission pipeline incidents , which was caused by an outside force . eleven
people had been injured through june .
in august 1999 , ops sent a warning letter to el paso , citing it for a number
of pipeline safety violations in arizona .
the ops did not impose a civil fine on el paso , but it advised the pipeline
that " should you not correct the
circumstances leading to the violation , we will take enforcement actions when
and if the continued violation comes
to our attention . "
- -
el paso blast may cinch tough pipe safety bill
the explosion on el paso natural gas ' system , which killed 10 people over the
weekend , may give congress
the added boost to pass a tough pipeline safety reauthorization bill when it
returns from recess in september ,
capitol hill insiders said monday .
" this just sadly proves why congress needs to act as soon as it returns [ on
sept . 5 ] to pass the pipeline safety
improvement act before any more innocent lives are taken , " said a
spokeswoman for sen . john mccain ( r - az ) .
in june , chairman mccain ' s senate commerce committee voted out the pipeline
safety improvement bill that
would , among other things , give states inspection and oversight authority
over interstate pipelines ; require
interstate pipelines to consult with states about their integrity plans ;
create stiffer penalties for pipeline safety
transgressors ; and offer protection to whistle - blowers who report pipeline
violations . mccain proposed the
agressive safety bill following the product pipeline explosion in bellingham ,
wa , that killed three in june 1999 .
" mccain has always been determined to pass this bill this year , but this
obviously sadly strengthens that resolve , "
she said . he " will make a determined effort for this to happen , " but whether
it ' s brought up for a vote on the senate
floor will be up to senate leader trent lott ( r - ms ) , the mccain spokeswoman
said .
" i have no doubts " that the senate will push for pipeline safety when it
returns , said terry boss , vice president of
environment , safety and operations for the interstate natural gas association
of america ( ingaa ) .
on the house side , a companion to mccain ' s bill has been introduced , as well
as a number of other pipeline safety
measures , but most are at the subcommittee level . but the issue could pick up
steam in the wake of the el paso
blast . " we must examine why this accident occurred and ensure that it must
never happen again , " said rep . joe
skeen ( r - nm ) .
" definitely it ' s a tragic situation , " boss said , referring to the explosion
near carlsbad , nm , which reportedly left a
crater about 20 feet deep , 46 feet wide and 86 feet long . five of the 10
fatalities were children , who were spending
a weekend camping and fishing with their family along the pecos river .
the political fallout from the disaster was being assessed in washington d . c .
yesterday . " any kind of incident
has political ramifications . . . . . we ' re just not sure how this is going to
' directly impact ' " pending legislation and
regulations , boss noted .